Tight markets, loss in financial assets blamed for drop
The Government Insurance Service System (GSIS) posted a hefty decline in its net income for 2015 behind a huge loss in financial assets amid tighter financial markets, the agency said Tuesday.
Data obtained from the GSIS website showed that the state-run pension fund’s unaudited net income in 2015 amounted to P48.85 billion, dropping 65 percent from the P140.22 billion net income in 2014.
The agency’s total income for 2015 declined 38 percent to P142.23 billion from P230.84 billion posted in 2014.
“2014 was a tough act to follow. We had a bond market and stock market that is doing well. It was when our assets were at historically high levels,” GSIS President and General Manager Robert Vergara, said during the Bulong Pulungan sa Sofitel held on Tuesday.
“Last year was a complete reverse, equity markets were bad, bond markets were bad. We did not have any property sales,” he added.
In particular, GSIS suffered a P2.51 billion loss in its financial assets in 2015, reversing a gain of P124.45 billion in 2014.
On a positive note, all other sources of GSIS income posted growth last year. These were: from insurance (up 7 percent to P89.98 billion in 2015 from P83.68 billion in 2014); from loans (up 4 percent to P22.31 billion from P21.26 billion); from investment properties (up 904 percent to P28.67 billion from P2.85 billion); and other income (P3.78 billion from a loss of P1.41 billion).
GSIS expenses, on the other hand, rose 3 percent to P93.37 billion in 2015 from P90.61 billion a year earlier.
The pension fund’s total assets were up 5 percent to P960.15 billion from P907.09 billion, while liabilities grew by 12 percent to P24.66 billion from P21.87 billion.
Going forward, GSIS is optimistic that its net income will bounce back this year on improving financial markets.
“But this year, despite the dreadful start of the year and with the stock market bouncing back, I think we are on track for that milestone of joining some of the financial institutions with over a trillion in assets . . . hopefully by the middle of this year,” said Vergara.
“Again, the markets will have a lot to do with that, but it seems to be something that is certainly within range,” he added.